Tesla Inc (NASDAQ: TSLA) has been hyping the Street for Thursday night’s Cybertruck reveal. Details have been scarce, and analysts are pining for clarity on performance, acceleration, truck-bed and towing capacity, and battery range.
Plans, Production, Costs
“Another focus of ours will be any commentary about how Tesla plans to produce this new model, with some current models having a lot of similar parts and thus being able to utilize the same production lines/Fremont and Giga, thus we have questions on how/where/if the Cybertruck will fit on the factory production and tooling line,” Wedbush analyst Daniel Ives wrote in a note.
Production will ultimately affect cost — an important factor in comparing the Cybertruck to Ford Motor Company (NYSE: F) and General Motors Company (NYSE: GM) alternatives. Wedbush expects CEO Elon Musk to keep his word about a $50,000 starting price.
But peers are skeptical. Credit Suisse noted that battery size impacts margins, and it anticipates a battery cost between $15,000 and $10,000, which is “disproportionately high” for a vehicle of such a low price point.
In addition to cost and production, analysts will be listening for where Cybertruck fits in Tesla’s delivery timeline.
“After the model Model Y launch fizzled on concerns this will cannibalize the Model 3, we expect a similar response to the truck,” Roth Capital analyst Craig Irwin said.
Many expect deliveries in 2021, after Rivian rolls out its model and before Ford and GM release theirs. This schedule may be one of the only ways to gain footing in a market dominated by the Big Three.
Market Ambivalence Towards Cybertruck
Overall, analysts are split on Cybertruck’s prospects.
“In a nutshell, we believe this next generation pickup truck could help Tesla expand its market opportunity outside its core customer base over time, although gaining market share with stalwarts such as Ford and GM entrenched in this landscape will be a difficult task for Fremont,” Ives wrote.
Credit Suisse disagrees. It expects Tesla to falter in a truck market with extreme brand loyalty and high commercial sales.
“Buyers of the Tesla truck are more likely to own the vehicle for lifestyle purposes rather than commercial purposes,” analyst Dan Levy wrote in a note.
They consider the Cybertruck more of a “lifestyle product” than a machine for heavy-duty work, although the unusual design confounds analysts attempting to identify a core buyer.
Main Takeaways For Tesla
Credit Suisse dismisses the pickup as a serious contributor to the Tesla franchise.
“It’s important to keep in mind that the ‘main event’ for Tesla remains Models 3 and Y,” Levy wrote. “Volumes for Tesla’s pickup are likely to be a fraction of those for Models 3 and Y.”
They forecast 50,000 pickups sold by 2025 compared to 300,000 Model 3s and 400,000 Model Ys.
“Accordingly, it will ultimately be Models 3 and Y that will define the success of Tesla,” the analysts said.
Tesla's stock traded around $350.40 per share at time of publication.